Companies are expanding beyond coastal provinces into inland central and west provinces to leverage low manufacturing costs and capture growing domestic markets. To be successful in geographical expansion, multinationals need to foresee the growth trajectory of provinces and regions in China to understand from where future growth will come. FSG has identified nine provinces of growth opportunity, which multinationals should focus on to maximize ROI in geographical expansion - refer to the green circle in the chart below (click image to enlarge):
As indicated in the image below (click image to enlarge) strong economic growth in western China can be attributed to organic growth from the provinces’ low base and favorable government polices launched in 2010 to bridge the gap between eastern and western China.
I will have a subsequent post to continue the conversation of provincial expansion in China. Check back later for a look at China’s potential urbanization and a closer analysis of nine key industries in the region.
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